The business leaders we speak and work with every day have a sense of the opportunity ahead. And they also recognize, and work to embrace, the uncertainty ahead after a decade of expansion and digital disruption on a grand scale.
They foresee continued political change, geographical challenges and, of course, understand that economic volatility and overall slowdown in growth is probably given, although the pace and timing are up in the air.
Amid this uncertainty, there is a certainty embraced by the CEOs and leaders that are most fit to succeed in the coming decade: Seizing the opportunities ahead will require the intelligent and aggressive pursuit of change.
My colleague, Hans-Paul Bürkner, our organization’s Chairman, and I have spent a lot of time thinking about this. And we agree that the winner will effect change with the following priorities and ideas on their minds.
The 2020s is no time to be average. Fortune moves with great speed. So, the time in which it can take to go from “hero” to “zero” has been halved in the last 20 years, our research shows. The bold CEO responds to this reality by concurrently managing the downside while aggressively investing where it really counts. In other words, she or he will right-size operations in a fading business area and maximize cash flow – and, at the same time, make some thoughtful, massive bets. In those cases, decisiveness and speed to scale are essential. Being pedestrian won’t cut it.
Every company is a tech company, regardless of its industry or sector. No matter the sector, the majority of companies will have to recast themselves, or at least reorganize big segments of enterprise, to take advantage of emerging “human-machine” opportunities. To compete effectively in terms of speed, product and business innovation, and to attract and keep the best talent, tech- and data-related adaptations will be essential. Companies will need to adopt a modular core data and tech architecture and combine that with highly scalable processes and agile front-end teams. For instance, a number of financial services companies are turning what were once giant sales and “relationship” businesses into apps. And leading industrial firms are working to become “bionic companies” – creating units to develop software, tech platform businesses and ventures.
At the same time, every business will still be a people business. While embracing technology as a core enabler will be crucial across all sectors, at the end of the day, people will make all the difference. Fast, effective change only happens if leaders mobilize most of their current teams, add data and technology specialists and retain the best talent. To make that happen you need people and teams to be energized and highly enthusiastic. Companies will need to make sure their workplace attracts and retains the best and the brightest, no matter how traditional or “non-tech” your industry might be.
Winners will always be on the hunt for ways to change the game. Today’s best CEOs are constantly looking around the corner – keeping their eyes on wrinkles in megatrends that may create opportunities. And they’re prepared to make the big-step changes that could double, triple or quadruple the size or value of the enterprise. Leaders can use a range of approaches to identifying opportunities, among them innovation “sprints” and deep dives into patent data. They may also analyze venture capital trends and take close looks at what emerging companies are doing, especially in less trodden places (for Western companies) like the Shenzhen Greater Bay and Israel. Bold CEOs also consider specific types of acquisitions, such as series of “tuck-in” purchases, or targets that may be underperforming in a downturn but with the potential to enhance a strong acquirer’s portfolio.
The organization of work should be in flux. Lots of companies are stuck in old ways of organizing work. The fittest companies are the fastest at reorganizing work, swapping teams (and leaders) and testing new things rapidly. “Agile at scale” needs to be the mantra. It pays off to make small adjustments quickly, rather than taking a long time to make big moves. Forward-looking CEOs will regularly ask themselves if the company needs to own all of its business units and functions. In so doing they may realize that the company will be more agile, grow faster and make more money if it spins out selected operations or turns them into stand-alone businesses that they invest in along with private equity or other outside capital.
“Multi-local” is more important than multinational. Global companies increasingly affect and touch local issues that relate directly to public policy and how people live their lives. Think about giant tech companies and the tremendous amount of data they possess, and how privacy issues put these firms in the center of important and sensitive political, policy and community-level discussions. The most successful global companies will establish themselves as resourceful, empathetic, local players in societies and communities around the world.
Last but not least, success, we believe, will depend in part on leaders and companies having a purpose that serves society. Leading companies will use their unique capabilities to help governments, institutions and civic organizations advance societal, environmental and community objectives. This will help the companies pursue their own business goals.